Staff recommends that City Council conduct a public hearing and approve the proposed resolution setting storm sewer assessments rates for FY23.

Storm sewer assessments are set annually by resolution. Storm assessments are based on zoning and square footage to reflect the relative storm water runoff of various land uses.  The existing rates are not adequate to provide for the capital investment and operating costs necessary to continue providing service at the current level. The attached resolution specifies the proposed rates that will result in an estimated overall 6% increase for FY23. During the Public Works budget presentation to Council in May 2022, staff discussed that most recent Construction Cost Index (CCI) was 8.9% and a 6% rate increase was proposed. Thus, the revenues produced under the proposed rates will not generate enough revenue to keep up with inflationary levels if these high levels of inflation continue, which will result in the need to cut or defer some planned construction projects utilizing storm funds that are in the approved FY23 - FY27 Capital Improvement Plan. 

City Council may:

• Approve the recommended resolution
• Approve an amended resolution; or
• Not approve a resolution.  If Council does not approve a resolution, an amended resolution to establish storm sewer assessments will need to be considered at a future City Council meeting to establish rates for FY23.

The proposed increase in the storm sewer assessment rates would increase an average 9,691 square foot residential lot by $3.20 from $53.20 per year to $56.40 per year and will generate approximately $288,000 for the storm sewer fund in FY23.